Australia became largest importer of fuel from Russian oil – report
Australia has become the world's largest individual importer of petroleum products made from Russian oil in third countries, despite a ban on direct Russian fuel supplies. A parliamentary committee has urged the government to urgently close this sanctions loophole.
This is stated in the report of the Australian Senate Committee on Foreign Affairs, Defence and Trade on the effectiveness of sanctions against Russia, presented on 20 August. The inquiry had been ongoing since November 2025.
Australia banned direct imports of Russian crude oil and petroleum products after the start of the full-scale war. However, the restrictions effectively cease to apply if Russian oil is first delivered to a third country, refined there, and the finished petrol, diesel or other products are exported to Australia.
In particular, Russian oil is delivered to refineries in countries such as India, after which the finished fuel can be legally sold on the Australian market. The parliamentary report notes that Russia continues to receive income from such supplies, despite the formal absence of direct oil trade between the two countries.
According to data presented during the parliamentary inquiry, after the start of the full-scale war Australia became the largest single national market for petroleum products refined from Russian crude oil. Materials previously presented to the committee also indicated billions of dollars in such imports.
The committee recommended that the government ban imports of petroleum products made from Russian oil, regardless of the country in which it was refined. Similar restrictions have already been introduced by the European Union and the United Kingdom.
The problem has been known to the Australian authorities for more than a year. A previous parliamentary inquiry also found that the legislative loophole allows Russia to earn significant oil revenues through third countries, and called on the government to strengthen oversight. The government itself had previously acknowledged that Australia cannot independently determine the origin of fuel after substantial processing overseas.
The new report also identified problems with the enforcement of existing sanctions. Since the Russian full-scale invasion in 2022, Australia has had no criminal prosecutions for violations of Russia-related sanctions.
The parliamentary committee noted that this is unlikely to mean a complete absence of attempts to evade sanctions. In its view, some violations may have gone undetected or not reached criminal prosecution.
At the same time, the Australian Sanctions Office as of the end of January had only 27.7 full-time equivalent staff, and only seven employees were directly involved in sanctions compliance and monitoring. The office itself has no investigative powers and must refer suspicions to the Australian Federal Police.
Overall, the committee formulated 11 recommendations. They include strengthening the resources of agencies responsible for sanctions, identifying all Russian assets subject to restrictions, and examining the possibility of their confiscation and subsequent use. The report emphasises that the arguments in favour of seizing and redirecting Russian assets are compelling, although such a step carries legal and financial risks.
The parliament separately identified the Russian "shadow fleet" as an issue: according to the inquiry materials, more than 70% of Russian oil is transported monthly by tankers used to circumvent Western restrictions. Australia has already imposed sanctions on such vessels – 200 tankers were targeted in 2025 alone.
At the same time, representatives of the ruling Labor Party on the committee disagreed with some of the report's critical findings. In particular, they called unfounded the assumption that the absence of criminal cases means that the authorities either fail to notice sanctions evasion or do not pursue already identified violations.
As The Sydney Morning Herald notes, Australia's dependence on imported fuel has increased sharply since the closure of most domestic refineries. The value of petroleum product imports rose from 19.9 billion Australian dollars in 2014 to 48.5 billion in 2024.
Based on materials from: Australian Senate, The Sydney Morning Herald
